Erie’s Path to Cannabis Sales: Erie Plays Catchup One Year After Becoming a Home Rule Town

Erie voters hit the polls on Nov. 4, passing a new ballot measure imposing a five percent sales tax on cannabis sales and ending the town’s cannabis moratorium on Jan.1, 2025. This begs the question: why did it take so long for Erie to catch up with nearby municipalities?

According to the City of Erie’s website, the Town Council decided to wait for the Home Rule matter to be determined before developing marijuana zoning regulations and offering voters the option of approving an excise tax. Home Rule gives the town authority of local self-government. The Home Rule Charter plays a significant role in Erie’s sales tax, which affects all sales, including cannabis.

“Any time we can diversify our tax base, it’s good,” Erie Town Council member Dan Hoback said. “I think the amount will be less than a million dollars a year if and when we ever have any dispensaries in the town. Nothing to sneeze at, but at the same time, it’s not going to change our budget drastically.”

Erie Town Hall on Sunday, Nov. 10, by Hope Muñoz

Smart Growth America says tax revenue diversification prepares communities for long-term stability. Increased revenue diversification can help local governments address issues when a local employer departs. The ballot issue predicts that tax revenue will increase by $800,000 in the first full fiscal year of the measure being passed. Funds will then be allocated by the Town Council.

Erie officially moved from a Statutory Town to a Home Rule town in Nov. 2023. Before the change, Erie was the largest Statutory Town in Colorado based on population. A Statutory Town is regulated by the state, following its government structures and laws. Taxes from Statutory Towns go directly to the state, and then a town must file to get them back. Statutory Towns cannot add excise or luxury taxes. Contrastingly, a Home Rule town or city can self-regulate more. It creates a charter/document it follows, unique to the municipality. Although the town can self-regulate, it is required to follow all constitutional regulations. Becoming a Home Rule town gave Erie the autonomy to propose the marijuana excise tax to voters.

“A group of elected representatives decided that they wanted to go Home Rule as opposed to the way it’s been done, and the premise, I think, is wrong,” Bradley Beck, an active Erie community member, said. “Local control does not necessarily mean better local government.”

Beck does not disapprove of the concept of Home Rule, but he disagreed with how Erie’s charter was written. In his opinion, it was too ambiguous and not protective enough of individual rights. In 2022, Beck shared his opinions on Home Rule on a local talk radio show.

The commission, composed of nine elected individuals, was responsible for drafting a Home Rule Charter within 180 days. After being approved by the Board of Trustees in April 2023, the charter was approved by voters in Nov. 2023. The document dictates how Erie is governed. It mentions ordinance procedures, town initiatives, Town Council elections, and more.

No matter what, the charter must follow the U.S. Constitution (which protects individual rights) and the State Constitution. The preamble to Erie’s charter states, “We affirm the rights of all residents to participate in the decisions that affect their lives, and we seek to promote transparency, accountability, and good governance at all levels.”

Home Rule allows local governments to establish certain sales tax rates. For example, Boulder has various excise taxes, including a five percent admissions tax on tickets sold for events that are not free to the public. These taxes are returned to the town for disbursement. According to the charter, new tax proposals must be approved by voters. This process played out on Nov. 4 when voters cast their ballots in favor of the tax.

According to a 2023 community survey of Erie residents, 67% of residents strongly or somewhat support ending the town’s cannabis moratorium. As a result, the town council began researching a possible ballot measure and zoning regulations.

Hoback said he has a neutral opinion on lifting the moratorium and imposing the sales tax. He does not think that any danger or crime will result from sales because nearby towns sell cannabis anyhow. Additionally, he can see the benefit that tax revenue will bring in.

“I don’t see the price of the marijuana and these dispensaries being outrageous,” Erie resident Ray Brown said. “I waited all my life to buy it legally, so the price seems pretty darn reasonable instead of going to prison, getting caught with something, you know?”

Brown began using cannabis products in Texas in 1978. At that time, cannabis products were much more difficult to get a hold of. Now, at 78, he doesn’t mind the sales tax much, especially in comparison to the old days.

Photo courtesy of Shutterstock

“I have to go to Lafayette,” Brown said. “I think that the fact that Erie has not had a dispensary doesn’t make very much sense.”

In Brown’s opinion, the convenience of having a dispensary nearby outweighs the cost of the sales tax. Brown said he uses CBD oil for a condition he has due to his shaky legs. He also uses cannabis products to help with sleep.

“A joint will last me a couple of months. I don’t smoke that much of it,” Brown said. “ $22 is probably cheaper than sleeping pills.”

The ballot measure will go into effect on Jan. 1, 2025. Testing, delivery, cultivation, and manufacturing in Erie are still prohibited. Only two dispensaries will be allowed, and prospecting businesses must be prepared to follow the provisions set by the measure. Regulations include zoning, distance, size, and ventilation.

“It’s not a matter of us choosing which stores as much as a store has to apply like any other business and go through the process,” Hoback said. “Probably the first two that can successfully navigate that process would be the two that we choose by default,” Hoback said.

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